C E R T A I N O F F - T H E - R O A D T I R E S FROM INDIA AND SRI L A N K A

INV. NOS. 701-TA-552-553 AND 731-TA-1308 (FINAL)

P U B L I C H E A R I N G B E F O R E T H E

UNITED S T A T E S INTERNATIONAL T R A D E COMMISSION

JANUARY 4 ,2017

STATEMENT OF P A U L HAWKINS

V I C E PRESIDENT, S A L E S

TITAN T I R E CORPORATION

Good morning. My name is Paul Hawkins. I am the Vice President of Sales at Titan Tire

Corporation. I have been with Titan for ten years, and I have overseen the company's off-fhe-

road tire business both on the operations side and the sales side.

More than eight years ago, I testified before this Commission's staff and appeared at the

Commission's hearing in the investigation on OTR tires from China. We are grateful the

Commission voted in the affinnative in that case, and we believe the facts once again support an

affinnative determination here.

Since the orders were imposed on OTR tires from China, producers in India and Sri

Lanka - both major producing nations for certain OTR tires - have increasingly focused their

growing capacity on expanding exports to the U.S. Companies such as BKT and Alliance in

India, and Solideal - now known as Camso - in Sri Lanka, have been inundating the market with

exports of OTR tires in recent years. As our Chairman testified, this increase is even more

significant given the overall decline in demand for OTR tires over the period.

The way these foreign producers were able to gain market share was through aggressive

price undercutting. The underselling data in your staff report confirms this, as our President and

CEO Paul Reitz testified. The data the Commission has collected is also consistent with my own

day-to-day experience as VP of sales for Titan.

Because price is such an important factor in our market, we are constantly trying to

gather information on competitors' prices and doing everything we can to match those prices.

We documented those efforts in my declaration included in our pre-hearing brief. Alarmed by

the sales we were losing to BKT and Alliance, we put together a special team to map out exactly

which accounts of ours carried those tires and at which prices they were being offered. We

found product from BKT and Alliance at the majority of the accounts we examined, and always

at lower prices. We have also worked to identify accounts where we compete with product from

Camso/Solideal and at what prices, an found them at dozens of accounts at much lower prices.

Much of this infonnation is based on what our customers share with us, sometimes in a direct

effort to get us to reduce our own prices.

When we see we are losing volume due to competition with tires from India and Sri

Lanka, we act quickly to try to compete and maintain whatever volume possible. It is common in

our industry to put out periodic price promotions on certain tire models. One of the ways we

choose which models to include in these promotions is by targeting products where we are losing

volume to low priced imports from India and Sri Lanka. Unfortunately, when import prices get

too low, even these deep discounts are not enough to help us maintain volume. We have taken a

double hit on our price and volume as a result of this import competition.

Our brands do not insulate us from this injury. Titan sells some ag tires that are

Goodyear brand and some that are Titan brand. We also sell other OTR tires under the Titan

brand. Goodyear is often identified as a "Tier One" brand and Titan as a "Tier Two" brand.

Many Indian and Sri Lankan products are also identified as "Tier Two" brands, as your staff

report shows. Thus, Titan and subject imports are competing directly with each other in the

middle tier of the market. There is also competition among tiers. Sales of our Goodyear tires

have also been affected by imports from India and Sri Lanka, and have also been included in the

price promotions I mentioned above.

While there may be a small premium for tires in higher tiers, this premium cannot

withstand the kind of deep price undercutting we have seen in the market. In the investigation on

OTR tires from China, the Commission estimated that there was a brand premium of about 10 to

15 percent. In our experience, any brand premium has only nareowed i f not disappeared since

that time. This is because of the increased price-sensitivity in the market our President and CEO

Paul Reitz testified to. Nonetheless, even i f a premium of 10 to 15 percent continued to exist,

this is dwarfed by the underselling margins of subject imports, which averaged 25.6 percent and

ranged as high as 47.5 percent. Such deep price undercutting affects producers throughout the

market, and higher tier brands must react i f they want to maintain volume.

Finally, I want to address Camso's attempt to minimize the impact of its imports on U.S.

producers by claiming it only sells into a narrow segment of the industrial/construction market.

Even i f Camso's sales are concentrated in the industrial/construction segment, this is a very

important part of the OTR tire market for our company. Titan produces a broad array of

industrial and construction tires that directly overlap with those produced by Camso. We are

forced to compete with Camso at many of our customers, and that competition is based on price.

The injury we have suffered is due to imports from both countries, and that is why we

respectfully request that the Commission make affirmative determinations on OTR tires from

both India and Sri Lanka. Thank you.